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on International Trade |
| By: | Ronzheimer, Ira Nadine; Durán Lima, José Elías; Budnevich, Cristóbal; Gomies, Matthew |
| Abstract: | This document, which was prepared as part of a collaborative project between the Economic Commission for Latin America and the Caribbean (ECLAC) and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), provides a methodology for disaggregating electric and conventional buses into their parts, in order to analyse international trade flows in electromobility components. The vectors developed are based on the 2017 version of the Harmonized Commodity Description and Coding System and include all parts needed to build electric or conventional (diesel) buses. The vectors capture global trade related to parts on three levels: raw materials, semi-manufactured parts and manufactured parts. Disaggregation into different parts also enables reconstruction of global value chains for electric buses and identification of the key suppliers of inputs at all three product levels. The methodology can also be employed to determine prospects for productive integration in the manufacturing of buses in Latin America and the Caribbean. |
| Keywords: | TRANSPORTE, ENERGIA ELECTRICA, COMERCIO INTERNACIONAL, AUTOBUSES, INNOVACIONES TECNOLOGICAS, RECICLAJE, COSTOS, POLITICA COMERCIAL, TRANSPORT, ELECTRIC POWER, INTERNATIONAL TRADE, BUSES, TECHNOLOGICAL INNOVATIONS, RECYCLING, COSTS, TRADE POLICY |
| Date: | 2022–07–19 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col022:48007&r= |
| By: | Simon A. B. Schropp (George Washington University); Christian Lau (Sidley Austin LLP); Olim Latipov (Sidley Austin LLP); Kornel Mahlstein (Sidley Austin LLP) |
| Abstract: | Following the recent G7 Summit in Germany, the United States announced a new sanction package that imposes significantly higher tariffs on products from Russia. These tariff increases concern 570 groups of products affecting more than $2 billion in imports from Russia. The declared objective of these tariff increases is to impose steep economic costs on Russia, while minimizing costs to U.S. consumers. The United States is also considering disbursement of revenues collected from these new tariffs to Ukraine. Using a sector-specific partial-equilibrium model and the most reliable data available, this paper quantifies the welfare impact that the U.S. tariff increases will have on the Russian and the U.S. economies, respectively. We find that the new U.S. tariff sanctions will affect $2.6 billion of U.S. imports from Russia (or 8.7% of total U.S. imports from Russia). Moreover, these new tariff measures may decrease Russian welfare by $181 million per year, while imposing annual costs of $90 million on U.S. consumers. The United States can hope to collect $241 million per year in tariff revenues that may then be used to financially support Ukraine. Our sectoral analysis shows that the U.S.' choice of target sectors produces mixed results. On one hand, the sanctions cover dozens of sectors whose inclusion produce particularly large welfare losses to Russia and/or high welfare gains to the United States. Yet, the sanctions package also raises serious questions about its effectiveness for other sectors. For example, higher tariffs for several selected sectors result in zero harm to Russia, and/or greater harm to the United States than to Russia. These and other insights may provide guidance for the design of future tariff sanctions by G7 Members and other Allies. |
| Keywords: | International trade; Russia; economic sanctions; import tariffs; economic impact; partial equilibrium; sectoral analysis; welfare analysis; pass-through |
| JEL: | F02 F13 F15 F52 |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:gwi:wpaper:2022-08&r= |
| By: | Gerval, Adam; Hansen, James |
| Abstract: | As recent trade disputes have led the United States to broaden export markets, the macroeconomic and developmental characteristics of sub-Saharan Africa (SSA) ostensibly indicate the region will likely be a destination for U.S. agricultural exports in upcoming years. However, many of these characteristics are symptomatic of the economic development struggles prevalent in the region, which present significant challenges to sustained development. Trade in high-value commodities, for example, may offer economic growth, but the benefits are not necessarily diffused throughout the broader economy. Serving as the primary source for economic growth, foreign exchange, and export revenue, exports of high-value commodities can create terms-of-trade shocks during periods of significant fluctuations in international prices. This can limit a country’s ability to trade effectively and alter trade flows due to the resultant depreciating exchange rate. The current Coronavirus (COVID-19) crisis has created such a period of intense price volatility, offering a unique opportunity for modeling potential effects of a global shock on trade with these nations. This working paper illuminates the impact that this volatility can have on U.S. agricultural product export values to SSA. By simulating the effects of declining oil prices in 2020 and subsequent years through a shock to gross domestic product (GDP) in oil-dependent nations—i.e., Angola and Nigeria—we can evaluate the impacts of COVID-19 on agricultural trade for key U.S. export commodities to SSA. |
| Keywords: | Crop Production/Industries, Demand and Price Analysis, Financial Economics, Food Security and Poverty, International Development, International Relations/Trade, Political Economy, Production Economics, Productivity Analysis, Risk and Uncertainty |
| Date: | 2022–05–19 |
| URL: | http://d.repec.org/n?u=RePEc:ags:usdami:323866&r= |
| By: | Jerg Gutmann; Hans Pitlik; Andrea Fronaschütz |
| Abstract: | The Russian invasion of Ukraine has caused disruptions in international trade and highlighted the dependency of small open economies in Europe on imports, especially of energy. These events may have changed Europeans' attitude towards globalization. We study two waves of representative population surveys conducted in Austria, one right before the Russian invasion and the other two months later. Our unique dataset allows us to assess changes in the Austrian public's attitudes towards globalization and import dependency as a short-term reaction to economic turbulences and geopolitical upheaval at the onset of war in Europe. We show that two months after the invasion, anti-globalization sentiment in general has not spread, but that people have become more concerned about strategic external dependencies, especially in energy imports, suggesting that citizens' attitudes regarding globalization are differentiated. |
| Keywords: | Austria, crisis, conflict, globalisation, attitudes, war |
| Date: | 2022–08–30 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2022:i:648&r= |
| By: | Julien Gourdon (CERDI - Centre d'Études et de Recherches sur le Développement International - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne, Université de Clermont-Ferrand); Laura Hering (Erasmus University Rotterdam); Stéphanie Monjon (Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres); Sandra Poncet (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | Our study shows that China's export value-added tax (VAT) rebate system is a major industrial policy that affects its exports. We use export data at the HS6 product level for a panel of 329 Chinese cities over the 2003-2012 period to assess how changes in the export VAT tax have affected China's export performance. We consider different trade margins in terms of volumes, prices, and the number of countries served. To counter endogeneity, we exploit variations in the expected impact of the export VAT rebates by trade regime, which come from an eligibility rule disqualifying certain export flows from the rebates. Our results suggest that a 1 percent decline in the export VAT tax leads to a 7.2 percent relative increase in eligible export values at the city level. This effect is due to an adjustment of quantities and the number of foreign markets served while the average unit values of exports remain unchanged. |
| Keywords: | China,Export performance,Export tax,Policy evaluation,Trade elasticity,VAT system |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:pseptp:hal-03274542&r= |
| By: | Shantayanan Devarajan (Georgetown University); Delfin S. Go; Sherman Robinson (Peterson Institute for International Economics); Karen Thierfelder (US Naval Academy) |
| Abstract: | Slowing global warming requires countries to reduce carbon emissions, which imposes costs on their economies. To be effective, most countries must agree collectively to participate (e.g., the Paris Agreement, COP26). However, every country has an incentive not to comply and still reap the benefits of other countries' actions--a classic free-rider problem. This paper evaluates recent recommendations to use trade policy to solve the free-rider problem associated with climate mitigation strategies. It shows that the European Union's carbon border adjustment mechanism (CBAM tariffs) are effective at offsetting the unfair competitive advantage of noncompliant countries in the markets of compliant countries but have little effect on the trade of noncompliant countries, who can divert trade to other noncompliers. CBAM tariffs alone have little impact on global CO2 emissions. The paper also examines "climate clubs" (coalitions of countries that agree to impose carbon taxes or other equivalent policies and impose punitive tariffs on non-club members to induce them to join the club). It finds that punitive climate club tariffs can be effective in inflicting significant damage on the economies of nonmembers, providing a strong incentive for them to join the club. The paper identifies trade dependence between club and non-club members as an important consideration for the success of a climate club. Club members that are strongly linked to non-club members suffer losses when the club punishes non-club members, which would make them hesitant to impose punitive tariffs on a major nonmember trading partner. |
| Keywords: | carbon taxes, greenhouse gas (GHG) emissions, climate clubs, carbon tariffs, carbon border adjustment mechanism (CBAM), computable general equilibrium (CGE) models, trade dependence |
| JEL: | F18 C68 Q54 Q43 |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:iie:wpaper:wp22-14&r= |
| By: | Auriol, Emmanuelle; Biancini, Sara; Paillacar, Rodrigo |
| Abstract: | The paper proposes an empirical analysis of the determinants of the adoption of Intellectual Property Rights (IPR) and their impact on innovation in manufac- turing. The analysis is conducted with panel data covering 112 countries. First we show that IPR protection is U-shaped with respect to a country’s market size and inverse-U-shaped with respect to the aggregated market size of its trade partners. Second, reinforcing IPR protection reduces on-the-frontier and inside-the-frontier innovation in developing countries, without necessarily increasing innovation at the global level. |
| Keywords: | Intellectual Property Rights; Innovation; Developing Countries; Market Potential; Trade |
| JEL: | F12 F13 F15 L13 O31 O34 |
| Date: | 2022–09–02 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:127263&r= |
| By: | Kox, Henk L.M. |
| Abstract: | The knowledge-capital (KC) model of FDI explains the international distribution of FDI, assuming that firms own proprietary knowledge assets that can at low costs also be exploited in foreign subsidiaries. The model's implication is that countries with much outward FDI should have a relative abundance of proprietary knowledge assets, which has up to now not been adequately tested, partly due to a lack of data. This paper extends the KC model by a module that formalises the encapsulation of public national knowledge assets into proprietary firm-level assets. It provides a way to test the basic tenet of the KC model. We exploit a new dataset (80 indicators, 209 countries, period 2000-2020) to identify the impact and statistical significance of national knowledge assets for explaining outward FDI. Our test confirms the validity of the KC model for explaining patterns of outward FDI. Several robustness tests confirm the stability of our findings. |
| Keywords: | foreign direct investment; knowledge-capital model; empirical testing; 2000-2020; 209 countries |
| JEL: | D21 F21 F23 |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:114177&r= |
| By: | Baronchelli, Adelaide; Caruso, Raul (University of Turin) |
| Abstract: | This paper empirically investigates the main drivers of Italian Small Arms and Light Weapons (SALW) exports from 1990 to 2017. Italy is a major player in the international trade of SALW being the second largest exporter of these weapons, and the largest if considering only sporting SALW. We apply data on exports from Italy to 143 countries using a gravity framework. Findings highlight that SALW trade appears to be complementary with overall military spending. In fact, Italian exports increase towards countries that are increasing military spending. Specifically, an increase of 1% in the level of the importing country’s military expenditure causes an increase of 0.6% in Italian exports to that country. In addition, results show that international embargoes reduce SALW exports. In the presence of an arms embargo, exports to the target country decrease by 64%. However, our findings also indicate a negative correlation between exports and torture. In other words, SALW demand is negatively associated with violations of human rights. |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:uto:dipeco:202206&r= |
| By: | Diao, Xinshen; Abdelradi, Fadi; Abay, Kibrom A.; Breisinger, Clemens; Dorosh, Paul A.; Pauw, Karl; Randriamamonjy, Josee; Raouf, Mariam; Thurlow, James |
| Abstract: | Global food, fuel, and fertilizer prices have witnessed rapid and significant increase in recent months, driven largely by the fallout from the ongoing war in Ukraine and associated sanctions im-posed on Russia. Other factors, including governments’ responses and export bans, have also con-tributed to rising prices (Laborde and Mamun 2022). Palm oil and wheat prices increased by 56 and 100 percent in real terms, respectively, between June 2021 and April 2022, with most of the in-crease occurring since February 2022. |
| Keywords: | EGYPT, ARAB COUNTRIES, MIDDLE EAST, NORTH AFRICA, AFRICA, poverty, food security, armed conflicts, crises, prices, shock, agrifood systems, equality, diet |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:gccbrf:18&r= |
| By: | Christoph Albert; Albrecht Glitz; Joan Llull |
| Abstract: | In this paper, we show that the wage assimilation of immigrants is the result of the intricate interplay between individual skill accumulation and dynamic equilibrium effects in the labor market. When immigrants and natives are imperfect substitutes, increasing immigrant in flows widen the wage gap between them. Using a simple production function framework, we show that this labor market competition channel can explain about one quarter of the large increase in the average immigrant-native wage gap in the United States between the 1960s and 1990s arrival cohorts. Once competition effects and compositional changes in education and region of origin are accounted for, we find that the unobservable skills of newly arriving immigrants increased over time rather than decreased as traditionally argued in the literature. We corroborate this finding by documenting closely matching patterns for immigrants' English language proficiency.. |
| Keywords: | immigrant assimilation, labor market competition, cohort, sizes, imperfect substitution, general and specific skills |
| JEL: | J21 J22 J31 J61 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:1280&r= |
| By: | Diao, Xinshen; Dorosh, Paul A.; Pauw, Karl; Thurlow, James; Pradesha, Angga |
| Abstract: | Global food, fuel, and fertilizer prices have risen rapidly in recent months, driven in large part by the fallout from the ongoing war in Ukraine and the sanctions imposed on Russia. Other factors, such as export bans, have also contributed to rising prices. Palm oil and wheat prices increased by 56 and 100 percent in real terms, respectively, between June 2021 and April 2022, with most of the increase occurring since February (Figure 1). Wide variation exists across products, with real maize prices increasing by only 11 percent and rice prices declining by 13 percent. The price of crude oil and natural gas has also risen substantially, while the weighted average price of fertilizer has doubled. With these changes in global prices, many developing countries and their development partners are concerned about the implications for economic stability, food security, and poverty. |
| Keywords: | PHILIPPINES, SOUTH EAST ASIA, ASIA, Ukraine, poverty, food security, armed conflicts, crises, prices, shock, agrifood systems, equality, diet, commodities, fertilizers |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:gccbrf:19&r= |
| By: | Franck Galtier (UMR MoISA - Montpellier Interdisciplinary center on Sustainable Agri-food systems (Social and nutritional sciences) - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - IRD - Institut de Recherche pour le Développement - CIHEAM-IAMM - Centre International de Hautes Etudes Agronomiques Méditerranéennes - Institut Agronomique Méditerranéen de Montpellier - CIHEAM - Centre International de Hautes Études Agronomiques Méditerranéennes - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement, Cirad-ES - Département Environnements et Sociétés - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement) |
| Abstract: | On international markets, prices of grains (wheat, maize) and vegetable oils (rapeseed, sunflower, soybean, palm) have been rising since mid-2020. Biofuels play a major part in this increase, and the war in Ukraine, which began in February 2022, has exacerbated it. Biofuels in fact link the price of these commodities to that of crude oil: when the crude oil price rises, the biofuels industry increases its demand for maize and vegetable oils. Temporarily limiting this industrial usage would reduce the price of these commodities. Moreover, in case of an increase in rice prices, one solution would be to authorise Japan to export the rice stock it has built up under World Trade Organization (WTO) rules. In order to prevent future crises, these two levers could be activated as soon as world prices of these agricultural commodities reach predetermined levels. |
| Keywords: | Price,price stabilisation,price policy,food product,grain,wheat,maize,rice,vegetable oil,rapeseed oil,sunflower oil,palm oil,soybean oil,crude oil,biofuel,fossil fuels,economic crisis,food security,domestic market,world market,food stock,WTO,Africa,United States,world,developed country,developing country,Russia,Ukraine,European Union countries |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:cirad-03733988&r= |
| By: | Xue BAI; MA Hong; MAKIOKA Ryo |
| Abstract: | An epidemic prevents face-to-face contact and increases information friction and search costs between firms. This paper analyzes the effects of attending the Chinese Export Commodity Fairs (the Canton fair) during the Severe Acute Respiratory Syndrome (SARS) on Chinese exports, using the information on exhibitors that attended the fair and the Chinese customs data. We utilize the random-shock nature of the SARS epidemic that impeded foreign buyers from attending the Canton fair and combine it with a difference-in-differences approach to solve selection issues. Our estimates suggest that firms attending at the Canton Fair during the SARS epidemic realized exports to fewer export destination countries compared to during non-SARS periods. The negative effect is particularly larger for firms with less access to foreign buyers, such as non-trading and small firms, suggesting that the absence of buyers raises information friction and search costs in the fair during the epidemic. Furthermore, the negative effect becomes insignificant a year after the fair, reflecting a short-term effect on export promotion. |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:22078&r= |
| By: | Gale, Fred; Davis, Eric |
| Abstract: | China limits imports of cotton by a quota and encourages textile manufacturers to purchase cotton from Xinjiang, a relatively remote region where 90 percent of China’s cotton is grown. Nevertheless, 1,581 textile manufacturers applied for a share of the import quota between 2016 and 2022, thereby demonstrating their strong interest in importing cotton. The quota applicants reported that imports comprised about 20 percent of the cotton they used, but a few large companies accounted for a disproportionate amount. About 14 percent of applicants said imported cotton comprised over half of the cotton they used. Multivariate analysis found that applicants in coastal provinces—thousands of miles from Xinjiang—used more imported cotton than similarly sized applicants in other regions. In contrast, textile manufacturers in Xinjiang reported imports constituted less than 2 percent of the cotton they used—and 66 percent reported using no imported cotton. While China’s imports of cotton are projected to gradually increase over the next decade, China’s dominant position in the cotton market appears to be weakening, with U.S. cotton exports shifting to other Asian countries. |
| Keywords: | Agribusiness, Crop Production/Industries, Demand and Price Analysis, International Relations/Trade |
| Date: | 2022–08–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:usdami:323873&r= |
| By: | Jean-Michel Benkert |
| Abstract: | The endowment and attachment effect are empirically well-documented in bilat- eral trade situations. Yet, the theoretical literature has so far failed to formally identify these effects. We fill this gap by introducing expectations-based loss aversion, which can explain both effects, into the classical setting by Myerson and Satterth- waite (1983). This allows us to formally identify the endowment and attachment effect and study their impact on information rents, allowing us to show that, in contrast to other behavioral approaches to the bilateral trade problem, the impossi- bility of inducing materially effcient trade persists in the presence of loss aversion. We then turn to the design of optimal mechanisms and consider the problem of maximizing the designer's revenue as well as gains from trade. We find that the designer optimally provides the agents with full insurance in the money dimension and, depending on the distribution of types, optimally increases or decreases the trade frequency in the presence of loss aversion. |
| Keywords: | Bilateral trade, loss aversion, mechanism design, endowment and attachment effect |
| JEL: | C78 D01 D02 D82 D84 D90 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:ube:dpvwib:dp2203&r= |
| By: | Samuel Bazzi (University of California - San Diego, NBER, and CEPR); Lisa Cameron (University of Melbourne); Simone Schaner (University of Southern California and NBER); Firman Witoelar (Australian National University) |
| Abstract: | Job seekers face substantial information frictions, especially in international labor markets where intermediaries match prospective migrants with overseas employers. We conducted a randomized trial in Indonesia to explore how information about intermediary quality shapes migration outcomes. Holding access to information about the return to choosing a high-quality intermediary constant, intermediary-specific quality disclosure reduces the migration rate, cutting use of low-quality providers. Workers who do migrate receive better pre-departure preparation and have improved experiences abroad, despite no change in occupation or destination. These results are not driven by changes in beliefs about average provider quality or the return to migration. Nor does selection explain improved outcomes for those who migrate with quality disclosure. Together, our findings are consistent with an increase in the option value of search: with better ability to differentiate offer quality, workers search longer, select higher-quality intermediaries, and ultimately have better migration experiences. |
| Keywords: | International migration, information, middlemen, quality disclosure, search |
| JEL: | F22 O15 D83 L15 |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:22-372&r= |
| By: | Joël Hellier |
| Abstract: | This paper proposes a new explanation for the rise in top performers income based on an asymmetry in globalization, with one country producing globalized non-rivalrous performances (music, films, series, entertainment programmes etc.) whereas other countries produce purely domestic ones. In the country with globalized performances, the globalization dynamics (growing number of countries involved in the global market) entails an increase in the number and incomes of performers and an increase in inequality by the top. The higher the performer’s talent, the higher the globalization-driven increase in income. In countries with purely national performances, the participation in the global economy reduces the number and incomes of performers and lessens inequality by the top. In contrast, when globalization is symmetric (all countries producing globalized performances), there is no change in the number and incomes of performers in all countries compared to autarky. These results are in line with several characteristics observed in activities directly impacted by the cultural supremacy of American and English speaking countries in the global economy: 1) the share of Anglo-Saxon countries in the top 100 richest is substantially higher for actresses, actors, singers and TV show and film producers than for other occupations (CEOs, businessmen etc.), 2) the increase in the share of top incomes is significantly higher in Anglo-Saxon countries, and 3) the increase in inequality is greater in those countries. |
| Keywords: | GAsymmetry; Globalization; Inequality; Superstars |
| JEL: | F66 J31 J44 L82 |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:ise:remwps:wp02422022&r= |
| By: | Jordan Bisset; Dirk Czarnitzki; Thorsten Doherr |
| Abstract: | We follow the migration patterns of European inventors and find evidence of a novel emigration determinant: policy uncertainty. We find that policy uncertainty raises the rate of inventor emigration by a notable magnitude. With a one standard deviation in the policy uncertainty of the home country, relative to the possible destination countries, the rate of inventor emigration increases by nearly 40%. Migrating inventors are subsequently exposed to lower levels of policy uncertainty in the destination country emphasising that uncertainty motivated the move. We conclude that these effects may have strong welfare implications at the aggregate level. |
| Keywords: | Out-Migration, Brain Drain, Uncertainty, Inventors |
| Date: | 2022–08–22 |
| URL: | http://d.repec.org/n?u=RePEc:ete:msiper:700195&r= |
| By: | Mary Amiti; Sebastian Heise; Fatih Karahan; Aysegul Sahin |
| Abstract: | Annual CPI inflation reached 9.1 percent in June 2022, the highest reading since November 1981. The broad-based nature of the recent inflation readings has increased concerns that inflation may run above the Federal Reserve’s target for a longer period than anticipated. In this post we use detailed industry-level data to examine two prominent cost-push-based explanations for high inflation: rising import prices and higher labor costs. We find that the pass-through of wages and input prices to the U.S. Producer Price Index has grown during the pandemic. Both the large changes in these costs and a higher pass-through into domestic prices have contributed toward higher inflation. |
| Keywords: | wages; import prices; inflation; Pass-through |
| JEL: | E31 F00 |
| Date: | 2022–08–23 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednls:94677&r= |
| By: | Delgado-Prieto, Lukas |
| Abstract: | This paper studies the labor market impacts of Venezuelan immigrants in Colombia. Exploiting spatial variation in exposure, I nd a negative e ect on native wages driven by the informal sector (where immigrants are concentrated) and a reduction in native employment in the formal sector (where the minimum wage binds for many workers). To explain this asymmetry, I build a model in which rms substitute formal for informal labor in response to lower informal wages. Consistent with the model's predictions, I document that the increase in informality is driven by small rms that use both labor types in production. |
| Keywords: | Immigration; Event study; Labor market; Informality |
| JEL: | F22 O15 O17 R23 |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:rie:riecdt:96&r= |
| By: | Haoying Wang; Rafael Garduno Rivera |
| Abstract: | With the recent administration change in Mexico, the fluctuations in national energy policy have generated widespread concerns among investors and the public. The debate centers around Mexico's energy dependence on the US and how Mexico's energy development should move forward. The goal of this study is two-fold. We first review the history and background of the recent energy reforms in Mexico. The focus of the study is on quantifying the state-level regional economic impact of the growing US-Mexico natural gas trade in Mexico. We examine both the quantity effect (impact of import volume) and the price effect (impact of natural gas price changes). Our empirical analysis adopts a fixed-effects regression model and the instrumental variables (IV) estimation approach to address spatial heterogeneities and the potential endogeneity associated with natural gas import. The quantity effect analysis suggests a statistically significant positive employment impact of imports in non-mining sectors. The impact in the mining sector, however, is insignificant. The state-level average (non-mining) employment impact is 127 jobs per million MCFs of natural gas imported from the US. The price effect analysis suggests a statistically significant positive employment impact of price increases in the mining sector. A one-percentage increase in natural gas price (1.82 Pesos/GJ, in 2015 Peso) leads to an average state-level mining employment increase of 140 (or 2.38%). We also explored the implications of our findings for Mexico's energy policy, trade policy, and energy security. |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2208.06928&r= |
| By: | Alfaro-Ureña, Alonso; Manelici, Isabela; Vasquez Carvajal, Jose |
| Abstract: | We study the effects of becoming a supplier to multinational corporations (MNCs) using tax data tracking firm-to-firm transactions in Costa Rica. Event-study estimates reveal that domestic firms experience strong and persistent gains in performance after supplying to a first MNC buyer. Four years after, domestic firms employ 26% more workers and have a 4 to 9% higher total factor productivity (TFP). These effects are unlikely to be explained by demand effects or changes in tax compliance. Moreover, suppliers experience a large drop in their sales to all other buyers except the first MNC buyer in the year of the event, followed by a gradual recovery. The dynamics of adjustment in sales to others suggests that firms face short-run capacity constraints that relax over time. Four years later, the sales to others grow by 20%. Most of this growth comes from the acquisition of new buyers, which tend to be “better buyers” (e.g., larger and with more stable supplier relationships). Finally, we collected survey data from domestic firms and MNCs to provide further insights into the wide-ranging benefits of supplying to MNCs. According to our surveys, these benefits range from better managerial practices to a better reputation. |
| JEL: | F14 F23 O12 D24 |
| Date: | 2021–11–16 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:112758&r= |
| By: | Ali K. Ozdagli; Jianlin Wang |
| Abstract: | Using the recent U.S.-China trade war as a laboratory, we show that policy uncertainty shocks have a significant impact on stock prices. This impact is less negative for firms that heavily rely on bank debt whereas non-bank debt does not have a mitigating effect. Moreover, the mitigating effect of bank debt is concentrated among zombie firms. A zombie firm that derives half of its capital from bank debt has no negative stock price reaction to increased uncertainty. These results are consistent with bank debt providing insurance for zombie firms in bad economic times. |
| Keywords: | Policy uncertainty; asset prices; debt structure; zombie firms; trade war |
| JEL: | E44 F13 G12 G20 G30 |
| Date: | 2022–08–19 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddwp:94665&r= |
| By: | Batiz-Lazo, Bernardo; González-Correa, Ignacio |
| Abstract: | We describe cross border payments between families in the US-Mexico corridor including a map of the technological infrastructure. |
| Keywords: | remittances, fintech, Mexico, USA |
| JEL: | E42 L81 N2 N8 |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:114233&r= |
| By: | Kohnert, Dirk |
| Abstract: | In July 2020, the EU Parliament voted in favour of Croatia’s application to become the newest member of the eurozone from January 1, 2023. Despite the setback caused by the COVID-19 pandemic, it met all the criteria for adopting the euro, high inflation, and the impact of Russia’s invasion of Ukraine. Croatia’s accession to the euro will be the first significant positive step in the European integration process since Brexit. It may depict perspectives for a further enlargement of the eurozone in the Balkans. The admission will also impact the EU Africa relations. In addition to the close foreign ties with South Africa, Zagreb established diplomatic relations with South Sudan, Somalia, the Central African Republic in 2020. Yet, regarding Croatia’s long-established relations with Africa it is decisive to take account of the lessons learned from its multifaceted African relations history. Croatian explorers like Dragutin Lerman, mostly unknown outside their home-country, had been active in exploring Sub-Saharan African countries in the early 20th century. During the Cold War political and economic relations between Yugoslavia (including Croatia) and the African nonaligned countries improved significantly between 1973 and 1981. Mutual economic cooperation between nonaligned countries had been encouraged to fight ‘underdevelopment’ in Africa. Thus, in 1971, within the framework of industrial cooperation, Yugoslav-Ghanaian joint ventures were established, for example, for forest exploitation and wood processing and for a joint factory for motorcycles and pumps in Ghana. In addition, Yugoslavia was the only non-African country to help fund the Organization of African Unity's (OAU) Liberation Committee, although Zagreb favored bilateral relations with individual liberation movements. However, both Croatia and South Africa faced difficulties during the transition process with the illegal arms trade due to high levels of corruption within the judicial system and police. Also the citizens of both countries lack of trust in the states capacity to impose social control opened the way for organized crime to work with impunity. Criminal groups used patron-client relationships with the citizens of South Africa and Croatia to establish and maintain a level of popular legitimacy that the state lacked. |
| Keywords: | Croatia;Yugoslavia; Zagreb; Balkans; Balkan Studies; Western Balkans; Cold war; Non-aligned movement; EU; Euro-zone; Sub-Saharan Africa; OAU; economic development; informal sector; international trade; Ghana; South Africa; African Studies; |
| JEL: | D31 D62 E26 F13 F22 F35 F54 N17 N47 O15 O17 O19 O52 O55 P27 Z13 |
| Date: | 2022–08–18 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:114243&r= |
| By: | Jacques Fontanel (CESICE - Centre d'études sur la sécurité internationale et les coopérations européennes - UPMF - Université Pierre Mendès France - Grenoble 2 - IEPG - Sciences Po Grenoble - Institut d'études politiques de Grenoble) |
| Abstract: | The globalized system of market production is in a strong crisis. Global warming, rare earths, GAFAM, economic war. Climate change poses a problem for the economic system that fostered the polluting industrial revolutions of coal and oil. Today, the digital economy revolution offers significant hope for reducing pollution and promoting decarbonisation. However, the economic interest struggles of the powerful lobbies of the polluting sectors seem to reduce the potential for transformation of an economic system driven by the search for shortterm profit. The major powers want to preserve their economic gains and are undertaking this revolution at a pace that suits them, which is not without conflict, given the urgency of action in the face of the harmful transformations undergone by ecosystems. Furthermore, the GAFAMs, the powerful providers of digital services and instruments, together with their Chinese competitors, have a considerable economic and strategic force that could undermine freedoms and human and citizens' rights. For the production of digital tools, rare earths are likely to pose new problems, those relating to the pollution involved in their production and their relative scarcity compared to the stocks known today. Finally, the economic war threatens the World Trade Organization, with the establishment of international and regional blocks. |
| Keywords: | Digital economy,climate change,GAFAM,Rare Earths,Economic war |
| Date: | 2021–02–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03740768&r= |
| By: | David Guerrero (AME-SPLOTT - Systèmes Productifs, Logistique, Organisation des Transports et Travail - Université Gustave Eiffel); Patrick Nierat (AME-SPLOTT - Systèmes Productifs, Logistique, Organisation des Transports et Travail - Université Gustave Eiffel); Jean-Claude Thill (UNC - University of North Carolina [Charlotte] - UNC - University of North Carolina System); Emmanuel Cohen (AME-SPLOTT - Systèmes Productifs, Logistique, Organisation des Transports et Travail - Université Gustave Eiffel) |
| Abstract: | As a process, containerization in Africa is still on-going. In the last decades, a number of new port projects have emerged in parallel with the reorganization of services by shipping companies. To reflect these changes, this paper studies several questions on the geographic differentiation of maritime connectivities across the continent as well as on the longitudinal trends in maritime connectivities in relation to evolving economic, trade and logistical contexts. To this end, we propose a synthetic visualization of the country-level containerized links using the Liner Shipping Bilateral Connectivity Indicator (LSBCI). The resulting graph, obtained through Multidimensional Scaling (MDS), shows that West Africa and East Africa appear as relatively separated subsystems, mediated by several countries in the Northern and the Southern parts of Africa. Between 2006 and 2016, West Africa, initially tied to Europe and America, is increasingly tied to Asia. Our results show major improvements in the maritime connectivity of Morocco, Djibouti and several West African ports. Conversely, most of mainland East African countries stagnate or decline. Connectivities have not converged across the continent. In some cases changes in maritime connectivity mostly result from variations in vessel size. We explore a method to identify these situations. |
| Keywords: | CONNECTIVITY,DEVELOPMENT,LINER SHIPPING BILATERAL CONNECTIVITY INDICATOR - LSBCI,VESSEL SIZE,CONTAINERIZATION,AFRIQUE |
| Date: | 2022–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03738595&r= |
| By: | James Lennox |
| Abstract: | Transport infrastructure is costly to build and very long-lived. Major projects are expected to enhance accessibility, which over time, is likely to a ect the distribution of population and employment. In a Dynamic Spatial Equilibrium (DSE) model, the timing and location of a project's direct costs and benefits can be explicitly represented. Effects of both construction and operational phases are captured in a forward-looking spatial general equilibrium with costly adjustment. Not only are dynamic responses of direct interest to policymakers, but they have crucial implications for welfare analysis. In this paper, we present a flexible DSE model incorporating dynamics of internal migration and occupation choice, and intra- period spatial linkages via commuting and trade flows. We calibrate the framework to Australian data and illustrate its application by modelling a hypothetical fast express rail service in South-East Queensland. In analysing the results, we highlight the roles of general equilibrium effects within and between periods. These are important both to overall welfare benefits and to their distribution. Transport cost changes are exogenous inputs to our simulation. However, we also discuss the potential to link a DSE model to a four-step strategic transport model to enable fully dynamic Land Use-Transport Interactions (LUTI) simulations. |
| Keywords: | dynamic spatial equilibrium, project appraisal |
| JEL: | R12 R23 R42 |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:cop:wpaper:g-335&r= |
| By: | Ajay Chhibber (George Washington University) |
| Abstract: | This paper lays out the contours of a reformed Bretton Woods Institutions - the IMF, the World Bank Group (WBG) and the WTO - that the world needs for the 21st century. Some of the challenges the world faces today - rising inequality, growing nationalism and protection are what led to World War II from whose ruin emerged the current Bretton Woods international financial architecture. While these institutions performed well over their first 50 years - they have been struggling in more recent times as problems of rising inequality, financial instability and protectionism have re-emerged. But in addition, the threat of climate change and ecological stress, rising disasters, and a more inter-connected world with new threats like cyber-security and pandemics require a new international financial architecture. A modernized and re-invigorated set of Bretton Woods institutions to help address and mitigate these challenges, with a global remit and the mandate to monitor agreed global rules and enhanced resources not only to help individual countries but also to address global problems. |
| Keywords: | Bretton Woods, IMF, WTO, World Bank, |
| JEL: | F40 F60 F02 E00 Q00 G20 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:gwi:wpaper:2022-06&r= |
| By: | Isaac K. Ofori (University of Insubria, Varese, Italy); Francesco Figari (University of Insubria, Varese, Italy) |
| Abstract: | This study employs macrodata for 23 African countries to examine whether good governance interacts with economic globalisation (EG) to foster inclusive green growth (IGG). First, the study finds that EG hampers IGG in Africa. Second, although unconditionally good governance promotes IGG, only government effectiveness interacts with EG to foster IGG. Across the social and environmental sustainability dimensions of IGG, however, the effects differ substantially. Notably, while the EG-governance pathways yield remarkable environmental sustainability net gains, a modest harmful effect was observed for socioeconomic sustainability. Evidence from our threshold analyses also suggests that while government effectiveness is critical for propelling EG to promote IGG, across the social and environmental perspectives of IGG, it is investments in building frameworks and structures for corruption control and the rule of law that are crucial. Our results shed new light on IGG and have several implications for Agenda 2030 and Agenda 2063. |
| Keywords: | Africa; Economic Globalisation; Governance; Inclusive Growth; Inclusive Green Growth; Greenhouse Gas Emissions; Sustainable Development |
| JEL: | F18 F4 F6 F63 F64 H1 O55 Q01 Q56 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:22/053&r= |
| By: | Ofori, Isaac K.; Figari, Francesco |
| Abstract: | This study employs macrodata for 23 African countries to examine whether good governance interacts with economic globalisation (EG) to foster inclusive green growth (IGG). First, the study finds that EG hampers IGG in Africa. Second, although unconditionally good governance promotes IGG, only government effectiveness interacts with EG to foster IGG. Across the social and environmental sustainability dimensions of IGG, however, the effects differ substantially. Notably, while the EG-governance pathways yield remarkable environmental sustainability net gains, a modest harmful effect was observed for socioeconomic sustainability. Evidence from our threshold analyses also suggests that while government effectiveness is critical for propelling EG to promote IGG, across the social and environmental perspectives of IGG, it is investments in building frameworks and structures for corruption control and the rule of law that are crucial. Our results shed new light on IGG and have several implications for Agenda 2030 and Agenda 2063. |
| Keywords: | Africa; Economic Globalisation; Governance; Inclusive Growth; Inclusive Green Growth; Greenhouse Gas Emissions; Sustainable Development |
| JEL: | F18 F4 F6 F63 F64 H11 O5 O55 Q01 Q56 |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:114377&r= |